Life Insurance How Much And When

Discussion in 'Money & Finances' started by Lon Tanner, Apr 23, 2017.

  1. Thomas Stearn

    Thomas Stearn Veteran Member
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    No life insurance either. Neither a (cheaper) term life insurance nor a (more expensive) cash-value life insurance or an endowment policy. They latter used to be popular among the older generation but are said to be "capital burners".
     
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  2. Beth Gallagher

    Beth Gallagher Supreme Member
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    We have life insurance provided as part of our retirement benefits, though I agree with others that it is not a necessity at this point in our lives. How much is not for publication.
     
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  3. Frank Sanoica

    Frank Sanoica Supreme Member
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    When I first married, a young man who sold insurance came to our front door. He explained how, if I bought Whole Life, I might be rich in 20 years. I did jump, being skeptical.

    Next day at work, I discussed it with some fellow employees. I was new there, relatively, and an old guy, Harry Kapps, working in the main office, called me up there. He had heard about my dilemma, and had brought a book for me: "Life Insurance: A Legalized Racket", copyrighted 1936. I read it, then prepared for the insurance salesman's return, which was soon after.

    I asked him if he knew what a Mortality Table was. Sure, it was used to establish premium rates. I asked him if he knew that the Industry universally used the Standard Mortality Tables of 1878? He was shocked beyond words. This was happening in 1965, almost 100 years later; how did life expectancy compare between then and now? And, far more revelations. He asked if he might borrow the book I spoke of. Sure, I trusted the guy. A member of our community, not much older than I. He had shown the book to his boss, read it, and returned it, stating he fully expected me to not buy insurance. I surprised him by buying a $20,000 W. L. policy (which I turned back in after several years, not rich, of course).

    The book, perhaps for academics, or help to some young folks, is readily available, even on line.

    See: https://www.worldcat.org/title/life-insurance-a-legalized-racket/oclc/16151716
     
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  4. Yvonne Smith

    Yvonne Smith Senior Staff
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    I sold life insurance for quite a few years, and I think that having it is a good idea, at least for people who are not totally wealthy. The salesman that spoke with @Frank Sanoica was promoting life insurance as a type of savings plan, which of course, it is not. For a while , people were making a lot of money with a Universal Life policy, because interest rates were going sky high. Then, the bottom dropped out from interest rates, and suddenly, people had no life insurance left.
    A whole life policy has the same rates for your whole life, where a term life increases as you get older.
    What seems sensible to me is getting a small whole life policy when you are younger, and keeping it. Since it does build cash value, you can borrow from that if you need to (and when you most need a loan is when a bank won’t approve it), or you can use it to pay your premiums if you are out of work and can’t make the payments for a while.
    If a person has a family to raise and needs more coverage, then also having a term policy for around 20 years will add to the proceeds if you should die while still raising your family.

    Once you are a senior like us, probably all you would need is a small burial policy, which is exactly what that whole life policy has become, and at the rate of the young person that you were when you purchased it, and not at the rate you have to pay if you purchase one now.
    A small policy will be paid immediately by the insurance company, so even if your bank account is tied up with probate, your family has the insurance money to help them get through this time period.
    Some policies let you cash it out before you die if you are terminal, so you can use the money for medical expenses, which is also a good thing, when needed.

    After saying alll this, I didn’t do it.
    I had the small whole life policy, but after losing everything in the divorce from my first husband, I let the policy go, which was stupid. Now, I had to get one at my age rate, plus with a bad heart. I ended up getting one that had to wait 2 years before it paid the full benefit, because that was the only thing cheap enough for me to afford the monthly payments.
    It is not much, but should be enough to cover final expenses when I die so that I won’t be a burden on my family.
     
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  5. Lon Tanner

    Lon Tanner Supreme Member
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    During my working and family life I carried up to $ 500,000 of life insurance and now own $ 65,000 of Paid Up life insurance.
     
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  6. Ken Anderson

    Ken Anderson Senior Staff
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    We have a plan but nothing like that, just enough so that the surviving spouse won't be in too much of a financial lurch, having to cover bills, pay funeral expenses, and so on. I don't know if it's a good idea to be worth more dead than alive.
     
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  7. Lon Tanner

    Lon Tanner Supreme Member
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    1. My life insurance is part of a retirement benefit package that went along with my Long Term Care Policy, 401K and pension.
     
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  8. Sheldon Scott

    Sheldon Scott Supreme Member
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    I have a $3000 policy that came with my retirement. When I retired I bought a $100,000 ten year policy that cost $895 per year. I have now lived more than 10 years so that has expired (better it than me). At our age we no longer need it plus we have more than that in our account.

    These "no questions asked" insurance programs advertised on tv are really expensive. Better to go to a regular insurance company. My policy was with Shelter. We have our house and autos with then too.
     
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  9. Frank Sanoica

    Frank Sanoica Supreme Member
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    @Thomas Stearn

    Endowment Policies are "pushed" by the salesmen. They produce immediate income for them in the form of commissions. Most profitable type for the Co., too. And, most cost to insured in terms of cost per death dollar paid.

    Second most undesirable: 20-year (or other term) Life. Make 20 payments get insurance for lifetime. Also, costly.

    Third: Whole Life, wherein annual payments are made until terminated. May be best compromise.

    Term Insurance policy. No set "life" for policy, continues until dropped. Most coverage for the buck. True insurance, made to appear by the Co. as poorly suited to the customer, discouraging purchase.

    Most appalling, to me, was the fact that when I married, 1965, and sought insurance, I learned the companies still used the STANDARD HUMAN MORTALITY RATE TABLES published in 1878! This meant far fewer died than predicted, guaranteeing added profit. The Federal Government finally stepped in with revisions to codes, requiring use of current death tables. Morbid, ain't it?

    Frank
     
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  10. Thomas Stearn

    Thomas Stearn Veteran Member
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    Yes, Frank, it is and not just in your country. Mortality Rate Tables have been misused here as well. As I said, I'm not a fan of insurance policies in general but I've always made sure I have those I'd need to protect me from ruin.
    Whole Life and Endowment Policies are actually the same, aren't they? What is the difference?
    I was thinking about taking out Term Life insurance once when I was building my house just to protect my family in case I died. But then again I decided that it wasn't necessary and didn't do it. But it may make sense under certain circumstances.
     
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  11. Lon Tanner

    Lon Tanner Supreme Member
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    Whole Life and Endowment policies are not the same at all. Look it up. Take too long to explain. All insurance policies pay a commission to the seller.
     
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  12. Thomas Stearn

    Thomas Stearn Veteran Member
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  13. Peter Renfro

    Peter Renfro Veteran Member
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    I have none. We have a funeral expense account and that is it. My children are grown,successful and I have no obligation nor do they expect me to enrich them on my demise.
     
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  14. Lon Tanner

    Lon Tanner Supreme Member
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    In September 2013 I paid $ 1,700 to the Nautilus Society. My survivor would call a toll free phone number to inform of my demise. The contract guarantees that my remains would be picked up where so ever located and taken to the nearest crematory for immediate cremation. My cremains would be either scattered at sea or given in a urn to my survivor at the survivor's discretion. I did considerable travel after I retired and was concerned about croaking in Australia, Portugal, or Tampa and my survivor having to make arrangements with local funeral staff. ALL costs of this process would be paid from my escrowed funds and there would be no additional charges.
     
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  15. Hal Pollner

    Hal Pollner Veteran Member
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    I'm auctioning off my funeral coverage policies.
    Hal
     
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